2025-10-27 20:02

Melissa could be Jamaica's strongest-ever storm Jamaicans, Cubans, brace for direct hit Across Caribbean, hundreds of thousands evacuate Four deaths reported in Haiti, Dominican Republic KINGSTON/HAVANA, Oct 27 (Reuters) - Hurricane Melissa was packing sustained winds of up to 175 mph (282 kph) on Monday afternoon, as the slow-moving Category 5 storm was on course to barrel into Jamaica, in what could be the largest on record for the Caribbean island. As of 2 p.m. (1800 GMT), Melissa was a "catastrophic" storm, the strongest possible on the Saffir-Simpson scale, according to the U.S. National Hurricane Center. The NHC expects Melissa to move over Jamaica late Monday or in the early hours of Tuesday, cross eastern Cuba the following night and move over the Bahamas and Turks and Caicos by Wednesday. Sign up here. The storm's slow movement over unusually tepid Caribbean water had contributed to its ballooning size and strength, NHC forecasters said, threatening Jamaica with days of never-before-seen catastrophic winds and as much as 3 feet of rain. Melissa's wind-span is currently larger than the length of Jamaica, an island roughly the size of Connecticut and whose main airports sit very close to sea level. Hours after ordering mandatory evacuations for parts of southern Jamaica, including the historic town of Port Royal, Prime Minister Andrew Holness called on foreign support and warned of damage to farmlands, homes and infrastructure such as bridges, roads, ports and airports. Despite warnings, some residents told Reuters they were reluctant to leave their homes for fear of looting, and authorities said buses were waiting to be filled up and transport some 28,000 affected by mandatory evacuation orders. "There is no infrastructure in the region that can withstand a Category 5," he said. Holness said his government was as prepared as can be, with an emergency response budget of $33 million and insurance and credit provisions for damage a little larger than those sustained from last year's devastating Hurricane Beryl. Beryl was the earliest and fastest Atlantic hurricane on record to reach Category 5, but scientists warn that storms are becoming stronger faster as a result of climate change warming ocean waters, piling up fuel for seasonal storms. "Tens of thousands of families are facing hours of extreme wind gusts above 100 mph and days of relentless, torrential rainfall," said AccuWeather Chief Meteorologist Jonathan Porter, adding infrastructure damages could hamper the arrival of aid. "Slow-moving major hurricanes often go down in history as some of the deadliest and most destructive storms on record," he added. "This is a dire situation unfolding in slow motion." Jamaica has seen many large hurricanes in the past, including Category 4 Hurricane Gilbert in 1988, but a direct hit from a Category 5 would be unprecedented, said Evan Thompson, of Jamaica's Meteorological Service. Melissa is moving much slower than Gilbert, Jamaica's last major direct hit, Porter added, warning people should prepare to hunker down for days and some communities could be cut off for weeks. 'WE CAN'T MOVE' Damian Anderson, a teacher from Hagley Gap, a town nestled in Jamaica's soaring Blue Mountains, said impassable roads had already cut off his community. "We can't move," Anderson, 47, said. "We're scared. We've never seen a multi-day event like this before." Nearby Haiti and the Dominican Republic have already faced days of torrential downpours leading to at least four deaths, authorities in those island nations said. In Haiti, impoverished by years of gang violence, more than 3,650 residents in southern parts of the country moved into temporary shelters, authorities said, as they suspended flights to and from the southern peninsula and banned sailing. Bahamian Prime Minister Philip Davis also ordered evacuations for people in southern and eastern parts of the archipelago, while much of eastern Cuba battened down ahead of Melissa's expected landfall. Cuban authorities said they had evacuated upwards of 500,000 people living in coastal and mountainous areas vulnerable to heavy winds and flooding, and canceled schools and transport across eastern Cuba. More than 250,000 people were brought to shelters around Santiago de Cuba, the island's second-largest city, which lies squarely in the crosshairs of the hurricane's predicted path. https://www.reuters.com/business/environment/hurricane-melissa-begins-lashing-jamaica-catastrophic-category-5-storm-2025-10-27/

2025-10-27 19:52

China-backed RCEP, world's largest trade bloc, holds rare summit Canada's Carney expects to meet Xi this week, open to meeting Trump Lula says trade deal 'guaranteed' after Trump meeting Europe, Japan concerned over China rare earth controls European Council's Costa says China delegation to visit Brussels KUALA LUMPUR, Oct 27 (Reuters) - China pressed on Monday for open trade and stronger economic ties at a regional summit in Malaysia dominated by the shadow of steep U.S. tariffs, as Canada's premier expressed readiness to meet U.S. President Donald Trump to defuse trade tensions. A day after Trump's six-hour blitz of meetings and trade announcements at the Association of Southeast Asian Nations summit in Kuala Lumpur, Chinese Premier Li Qiang called on regional leaders to uphold free trade and oppose protectionism, a phrase China has used to call out Trump's tariffs. Sign up here. "We must fully safeguard the hard-earned peace and stability in East Asia," Li said at a meeting of ASEAN, Japan, China and South Korea. He urged countries to "uphold free trade and the multilateral trading system, oppose all forms of protectionism, and continuously advance regional economic integration". In a flurry of deal-making on his first stop of a five-day tour of Asia, Trump on Sunday oversaw the signing of an expanded ceasefire he brokered between Cambodia and Thailand and trade framework agreements with four countries, none of which reduced import tariffs, though they left room for exemptions. 'READY TO SIT DOWN WITH UNITED STATES' Canada's Prime Minister Mark Carney on Monday said his government was working to secure trade deals in the Indo-Pacific and expected to meet Chinese President Xi Jinping on the sidelines of the APEC meeting in South Korea this week. Carney said he was also open to meeting Trump, who has been incensed over a tariff-related Ontario political ad that has complicated their delicate trade negotiations. "We stand ready to sit down with the United States, myself, with the president, my colleagues, with their colleagues, when the U.S. is ready to sit down," Carney told a press conference, adding he had not seen specifics on the additional 10% that Trump said he would impose on Canadian goods following the ad. But while en route to Japan on Monday, Trump said he did not want to meet Carney, adding, "I’m not going to be meeting with him for a while." Brazilian President Luiz Inacio Lula da Silva on Monday struck a positive tone on his country's tariff tensions with the United States and said his meeting with Trump a day earlier "guaranteed" a more favourable trade deal than the current 50% tariff on Brazilian goods. "I told him it was extremely important to take into account Brazil's experience as the largest country in South America," Lula, as he is popularly known, told a press conference. RCEP HOLDS RARE SUMMIT, SEEKS FASTER EXPANSION While China's premier and leaders of Brazil, Canada, the European Council and the 11-strong ASEAN bloc were at events seeking to solidify economic partnerships and hammer out trade pacts, the United States was represented on Monday by two lower-profile officials in Kuala Lumpur. The China-backed Regional Comprehensive Economic Partnership, comprised of ASEAN states, Australia, Japan, New Zealand and South Korea, held its first summit since 2020 and called for wider trade efforts and the faster addition of new members. The world's largest trading bloc, RCEP covers about 30% of global gross domestic product and is touted by some analysts as a potential buffer against U.S. tariffs. European Council President Antonio Costa said the European Union would look to finalise trade agreements with Malaysia, Thailand and the Philippines soon. Costa met China's Li and said he conveyed strong concern about Beijing's expansion of export controls on critical raw materials and said a high-level delegation from China would be in Brussels in the coming weeks. Beijing controls more than 90% of the world's supply of rare earth materials, essential for high-tech manufacturing, including electric vehicles, semiconductors and missiles and the issue has also been a major sticking point in its trade war with Washington. "We are very concerned about the trade relationship with China, especially the recent measures that China adopted," Costa told reporters, adding, "we hope to address these in the proper way." Japan's foreign ministry also expressed concerns over China's curbs and questioned its rhetoric on wider trade. "They have imposed or tried to impose export restrictions on rare earths that have had a great impact on the supply chain," spokesperson Toshihiro Kitamura said. "They try to make use of these U.S. tariff issues in order to pretend as if they are the guardian or champion of the free trade system." https://www.reuters.com/world/china/world-leaders-look-build-economic-trade-ties-after-trump-departs-asean-summit-2025-10-27/

2025-10-27 18:42

Block trade bets on tighter SOFR-fed funds spread Trade is a break from SOFR-fed funds trend this year Fed expected to announce end of quantitative tightening NEW YORK, Oct 27 (Reuters) - A sizable block trade in the U.S. rates market late last week appeared to be positioning ahead of the Federal Reserve's expected announcement to finally end its long-running balance sheet reduction program, known as quantitative tightening (QT). CME Group data showed a huge block trade last Thursday of 40,000 contracts that expire in November, a wager that the Secured Overnight Financing Rate (SOFR) - an overnight repo rate - will average less than nine basis points above the expected federal funds rate, the U.S. central bank's benchmark rate, in November. Sign up here. The trade marks a departure from this year's trend and reflects growing expectations that the Fed will announce the conclusion of QT at the end of its policy meeting on Wednesday. SOFR , currently at 4.24%, is the overnight borrowing rate for short-term cash mostly secured by Treasuries as collateral. The fed funds rate , currently at 4.11%, is the cost of unsecured overnight loans banks charge each other to meet reserve requirements. According to traders, the 40,000 contracts suggested that the position would gain or lose roughly $2 million for each basis-point (bp) move in rates. This measure of interest rate risk is known as "DV01." It's a massive position, analysts said, given that the trade's exposure is almost purely a one-month rate spread. Analysts said this trade's rate sensitivity is roughly equivalent to holding $2-$3 billion in 10-year Treasuries. Essentially, the trade implied SOFR will average 3.95% or lower and the Fed's policy rate will be 3.86% or higher in November if the central bank announces the winding down of its QT program and as it follows through with its expected quarter-percentage-point rate cut at its two-day meeting this week. That's in contrast to what the forwards market is suggesting. One-month forwards last Friday showed that traders expect SOFR to trade 10 bps higher than the fed funds rate by the end of November, a record spread, suggesting still tight repo funding conditions. "It's a trade that plays into the view that the Fed will stop QT (this week) and announce new policies to calm funding markets, allowing SOFR to come down from current levels relative to fed funds," said Steven Zeng, U.S. rates strategist at Deutsche Bank. Fed Chair Jerome Powell said on October 14 that the central bank is ready to end QT, citing tighter liquidity conditions, including firmer repo rates. Periods of QT often coincide with higher repo because when Treasuries and agency securities mature, the Fed does not reinvest the proceeds. The Treasury then redeems the debt and pays the central bank by subtracting the required amount from the cash balance it holds on deposit at the Fed. To replenish that cash balance, the Treasury must issue new debt. Investors purchase these new securities using funds from their bank accounts, which in turn reduces the level of bank reserves. This decline in available cash or reserves for overnight lending by banks and money market funds puts upward pressure on repo rates. LOWER REPO RATES AS QT ENDS When QT ends, the reverse happens. The decline in reserves halts, or they may even start to rise as the Fed reinvests maturing securities, leading to more liquidity in the system and lower repo rates. Repo rates have also risen due to the aggressive bill issuance by the U.S. Treasury to build its cash balance after the debt ceiling was lifted over the summer. The increased bill issuance has raised the need for repo financing to absorb all those Treasuries in the market. Jonathan Cohn, head of U.S. rates desk strategy at Nomura, echoed Deutsche's Zeng in attributing the motivation behind the SOFR-fed funds trade to the Fed's balance sheet dynamics. He also noted some expectation that the central bank will most likely "backstop liquidity, say, by injecting reserves back into the system or offering lower rates on their liquidity release operations." Since the middle of October, SOFR has consistently hovered near the upper bound of the Fed's 4.00%–4.25% policy rate range, even briefly exceeding it on two occasions. It has traded above the fed funds rate since August 22 and, prior to that, had outpaced the central bank's benchmark for much of the year. Jan Nevruzi, U.S. rates strategist at TD Securities, believes the CME trade likely wasn't solely driven by QT. Instead, he sees it as a reflection of stretched valuations evident throughout the year, suggesting the investor was probably "fading levels." Ideally, SOFR should trade below the fed funds rate, as it is backed by Treasuries and carries minimal credit risk. In contrast, the fed funds rate reflects unsecured interbank lending, which involves counterparty risk. As a result, lenders in the fed funds market typically demand a slightly higher rate than SOFR to compensate for that risk. Last Friday, however, SOFR was 13 basis points above the fed funds rate - an unusual inversion that underscores shifting forces in short-term funding markets. https://www.reuters.com/business/big-rates-market-trade-envisions-end-fed-balance-sheet-unwind-2025-10-27/

2025-10-27 17:49

MEXICO CITY, Oct 27 (Reuters) - Mexican state energy company Pemex pumped less crude while scaling up its processing in the third quarter, it said on Monday, as it reported a smaller net loss than in the same quarter a year ago. Pemex and its partners pumped an average of 1.66 million barrels per day of crude oil and condensates during the third quarter of this year, down 6.7% from the same period of 2024, a filing with the Mexican stock exchange showed. Sign up here. With many fields declining rapidly - especially former star producers in the Gulf of Mexico - and many new discoveries not living up to expectations, the behemoth has struggled to meet the government's ambitious production goal of 1.8 million bpd. Pemex meanwhile processed an average of 1.01 million bpd in the quarter, 4.8% more than in the same quarter last year. PLANS TO WORK WITH PRIVATE COMPANIES CEO Victor Rodriguez told investors in a call that the company's current plan seeks to increase production with the help of private companies, adding that some 40 companies had expressed interest. Pemex reported that it had selected ten such projects and was evaluating another 11 for these so-called mixed contracts. Much of what the company can realistically do - squeezing more barrels from mature fields and exploring new possibilities - hinges on financial resources. COMPANY NARROWS QUARTERLY NET LOSS Pemex reported a net loss of 61.25 billion pesos ($3.34 billion) for the quarter, from a loss of 161.34 billion pesos a year ago, while revenues in the quarter fell about 11% from a year ago to reach 378.9 billion pesos. It also booked a foreign exchange gain of 33.4 billion pesos during the quarter, driven by the depreciation of the dollar against the peso. In the filing, Pemex said its financial debt totaled $100.3 billion at the end of the quarter, despite efforts from the government to bring it down. Its debt with suppliers and contractors stood at $28.13 billion. During the government of President Claudia Sheinbaum, Pemex aims for net zero new debt, officials reiterated on Monday, adding that the company would shave off another 10% from its financial debt by year-end. ($1 = 18.3147 Mexican pesos at end-September) https://www.reuters.com/business/energy/mexicos-pemex-reports-q3-net-loss-6125-bln-pesos-2025-10-27/

2025-10-27 16:41

UBS hopes to get approval for US licence next year Swiss bank is facing tougher regulations at home UBS has examined relocating if Swiss regulation too extreme ZURICH, Oct 27 (Reuters) - UBS (UBSG.S) , opens new tab has applied for a banking licence in the United States, the Swiss bank said on Monday, underlining its desire to ramp up wealth management in the world's biggest economy even as regulators at home seek to limit its ambitions abroad. Since taking over Credit Suisse after its former rival's collapse in 2023, UBS has faced new regulations in Switzerland that it views as so extreme that it has examined the possibility of moving its headquarters abroad, insiders say. Sign up here. While senior UBS executives insist the Zurich-based bank has no intention of leaving Switzerland, establishing a more solid U.S. bridgehead could help it grow its business as it seeks to satisfy investor demands for greater returns. DRIVING GROWTH IN THE UNITED STATES In a memo to staff seen by Reuters, Rob Karofsky, the president of UBS Americas, and Michael Camacho, head of UBS Global Wealth Management US, said the bank had filed its application for a National Bank Charter for UBS Bank USA. "This step is part of our long-term goal to build on UBS's status as a premier global wealth manager in the U.S. and invest in areas that will drive growth," the memo said. Aiming to prevent a repeat of the Credit Suisse meltdown, the Swiss government has proposed stricter capital rules to back UBS's foreign units, a step Finance Minister Karin Keller-Sutter said will make growing abroad "more expensive" for the bank. UBS is concerned the rules will put it at a disadvantage to competitors and hopes it can thrash out a compromise. BANK LOOKING FOR APPROVAL IN 2026 If granted, the licence would allow UBS to match the full range of services offered by U.S. banks, including checking accounts, savings accounts and mortgages. UBS said it anticipated approval in 2026, subject to regulators. If granted, UBS would be the first Swiss bank to obtain such a licence in the United States. The memo said the application did not signal immediate product launches, but paved the way for future steps. New product and service development is a complex process lasting years that will roll out in phases, UBS said. The United States, where more than 1,000 people became millionaires every day in 2024, is the most important growth market in UBS's core wealth management business. One media report in September said UBS was mulling a move to the U.S. UBS is less profitable than leading U.S. banks such as Morgan Stanley (MS.N) , opens new tab, a gap which it aims to narrow. Sergio Ermotti, the UBS CEO, said in 2024 that the bank has the cost base of a much larger organisation but lacks the product offering to fully exploit its potential. Wealth management in the U.S. is a scale business, UBS Chairman Colm Kelleher said late last year, noting that Morgan Stanley managed to double its profitability after it bought U.S. financial services firm Smith Barney. https://www.reuters.com/business/finance/ubs-files-application-us-banking-licence-2025-10-27/

2025-10-27 14:38

BUENOS AIRES, Oct 27 (Reuters) - Argentine President Javier Milei on Monday urged moderate opposition lawmakers to back his reform agenda during the next two years of his term, after his party cruised to victory in midterm legislative elections, sending local markets soaring. Milei's La Libertad Avanza party won 40.68% of the votes, compared with 31.69% for the Peronist coalition, official results showed. The president said the important thing now was to get reforms approved. Sign up here. "The worst is behind us," Milei told local television channel A24. "I'm going to seek the votes I'm missing (in Congress) to implement these reforms," he added, referring to potential alliances with lawmakers and governors. Milei reaffirmed plans to push through labor, pension and tax reforms after strengthening his bloc's presence in a Congress previously dominated by the opposition. Argentina's peso strengthened 10% to 1,355 per U.S. dollar in early Monday trading after the midterm election, while the country's main stock index (.MERV) , opens new tab jumped nearly 20%. Milei confirmed he will make changes to his cabinet, many of which "forced" as some ministers will now be Congress members, but noted he has time until the new lawmakers take office on Dec. 10. Security Minister Patricia Bullrich won a Senate seat, Defense Minister Luis Petri was elected to the lower house, and presidential spokesman Manuel Adorni will serve as a legislator in the city of Buenos Aires. "I have to form the new cabinet in order to negotiate and pass the laws I committed to with the Argentine people," Milei said. https://www.reuters.com/world/americas/argentine-peso-jumps-after-milei-win-midterm-elections-2025-10-27/